Doctors being high-income earners are the target of the financial service industry. They are sold ‘investment products’ with huge hidden costs. What is worse is that because of the commissions, bad products are pushed.
Doctors can significantly increase their wealth by investing in zero commission (ie indirect fees) investments and go for a performance fee model.
Investment Planning For Doctors Is Different
A doctor with practice has a typical learning and earning curve. Their learning takes longer than others, and the earnings take time to peak tending to be lumpy. Expenses tend to be lump too, necessitating a financial plan. Since doctors start earning a steady income later than others, have hectic work schedules and do not have much time to devote to money matters, it is important to prepare a financial plan for a financial future.
Six Money Management Tips For Time Starved Doctors
1. Health Insurance
A medical professional is exposed to various diseases and often work in environments that pose a risk of infection. Hence a comprehensive Health Insurance Plan and Critical Illness cover are required.
2. Indemnity Cover
Doctors are also at high risk for financial liabilities and require special protection against claims for negligence, mistakes, or malpractices. This requires a professional indemnity policy.
3. Loan Repayments
Medical education is costly leaving a newly minted doctor with a huge education loan. A financial plan ensures that their debts are paid on time.
4. Expenses For Clinic
Doctors wishing to set up their own clinics need huge expenses for infrastructure and equipment. A financial plan will ensure that meet this aspiration realistically.
5. Skill Upgrade
The medical profession is one of the most dynamic. Successful doctors plan their finances to educate themselves and upgrade their skills continuously.
Doctors in the age group of 45+ who have established themselves need a wealth plan more than a financial plan. An unbiased advisor with a 0% commission model will help here.
Conclusion – What a Doctor Must Do
Because a doctor has limited time to become an investment expert, he/she is a target for distributors to increase their sales. Often mis-selling occurs and closed-ended funds, NFOs, ULIPs, etc are pushed.
The value derived in terms of an actionable financial plan puts the doctor in full control of their finances, with the comfort that the advice is unbiased and of the highest order.
Ensure a SEBI Registered Investment Advisor works for you, because this assures you of high-quality service with a clean model, compared to commission agents.